In general, production possibilities curves are "bowed out" because:
A)it's wasteful to produce too much of any one good.
B)people generally prefer to consume goods in appropriate combinations.
C)of the law of increasing opportunity cost.
D)of the law of demand.

Question

Quizplus · Accepted Answer

The "bowed out" shape of production possibilities curves reflects the law of increasing opportunity cost, which states that as production of one good increases, the opportunity cost of producing an additional unit of this good increases. This is because resources are not perfectly adaptable to the production of all goods, so shifting resources from the production of one good to another becomes increasingly costly.

In General, Production Possibilities Curves Are "Bowed Out" Because